Derwent downbeat on City rents

CENTRAL London property developer John Burns of Derwent Valley said he expected rents to remain subdued for another nine months to a year. But he said lettings were ticking along and its midmarket portfolio, with a rental range of £30-£50 per square foot, was less vulnerable to rent falls than its prime sites.

At the end of the half-year, Derwent's West End properties were up 1.2% in value while the City properties fell by 2.5%. In total the portfolio was valued slightly higher than last year, giving a net asset value of 1016p per share, up 1.2%.

Gross rents were £800,000 higher at £22.8m, the increase split evenly between rent rises and acquisitions. Pre-tax profits fell £300,000 at £9.1m, due to lower profits from disposals.

Burns said tougher planning regulations in central London benefited a company such as Derwent, accustomed to devising redevelopment schemes rather than new builds. The only building acquired in the first half was an office block of 1660 square metres in WC1, costing £5.2m.